Finance Act , 1994

“qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to that expenditure, or in respect of or by reference to the qualifying premises or the construction or, as the case may be, refurbishment work in respect of which it was incurred, which the individual has received, or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;

“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by such an individual as that individual's only or main residence;

“qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (5) and (6) of section 47, a house—

(a) the site of which is wholly within a designated area, or which fronts onto a designated street,

(b) which is used solely as a dwelling,

(c) in respect of which, if it is not a new house (within the meaning of section 4 of the Housing (Miscellaneous Provisions) Act, 1979) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house to which the certificate relates is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and

(d) the total floor area of which—

(i) is not less than 30 square metres and not more than 90 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or

(ii) is not less than 35 square metres and not more than 125 square metres in any other case:

Provided that where the qualifying expenditure has been incurred on refurbishment of the qualifying premises the reference in paragraph (d) (i) to “90 square metres” shall be construed as a reference to “125 square metres”;

“refurbishment” has the same meaning as in section 45.

(2) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 immediately subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from the individual's total income of an amount equal to—

(a) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent. of the amount of that expenditure, or

(b) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent. of the amount of that expenditure:

Provided that a deduction shall be given under this section in respect of qualifying expenditure only in so far as that expenditure falls to be treated under section 47 (8) as having been incurred in the qualifying period.

(3) Notwithstanding subsection (2), where qualifying expenditure has been incurred in relation to a qualifying premises which fronts onto a designated street, a deduction shall be given under this section if, and only if, that expenditure has been incurred on the refurbishment of the qualifying premises.

(4) Where qualifying expenditure in relation to a qualifying premises is incurred by two or more persons, they shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure and the expenditure shall be apportioned accordingly.

(5) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 142 of the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to deductions under this section.

(6) Section 198 (inserted by section 18 of the Finance Act, 1980) of the Income Tax Act, 1967, is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xiii) (inserted by section 35 of the Finance Act, 1987):

“(xiv) so far as it flows from relief under section 46 of the Finance Act, 1994, in the proportion in which they incurred the expenditure giving rise to the relief,”.

(7) The provisions of section 47 shall have effect for the purposes of supplementing this section.

47 Provisions supplementary to sections 43 to 46.

47.—(1) In this section “certificate of reasonable value” has the meaning assigned to it by section 18 of the Housing (Miscellaneous Provisions) Act, 1979.

(2) In sections 43 to 46—

“certificate of reasonable cost” means a certificate granted by the Minister for the Environment for the purposes of section 43, 44, 45 or 46, as the case may be, stating that the amount specified in the certificate in relation to the cost of construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the house to which the certificate relates appears to the Minister at the time of the granting of the certificate and on the basis of the information available to the Minister at that time to be reasonable, and section 18 of the Housing (Miscellaneous Provisions) Act, 1979, shall, with any necessary modifications, apply to a certificate of reasonable cost as if it were a certificate of reasonable value;

“house” includes any building or part of a building used or suitable for use as a dwelling and any out-office, yard, garden or other land appurtenant thereto or usually enjoyed therewith;

“total floor area” means the total floor area of a house measured in the manner referred to in section 4 (2) (b) of the Housing (Miscellaneous Provisions) Act, 1979.

(3) A lease shall not be a qualifying lease for the purposes of section 43, 44 or 45 if the terms of the lease contain any provisions enabling the lessee or any other person, directly or indirectly, at any time to acquire any interest in the house to which the lease relates for a consideration which is less than that which might be expected to be given at that time for the acquisition of the interest if the negotiations for that acquisition were conducted in the open market at arm's length.

(4) A house shall not be a qualifying premises for the purposes of section 43, 44 or 45 if it is occupied as a dwelling by any person who is connected with the person who is entitled, in relation to the expenditure incurred on the construction of, conversion into, or, as the case may be, refurbishment of, the house, to a deduction under section 43 (2), 44 (4) or 45 (2) as the case may be, and the terms of the qualifying lease in relation to the house are not such as might have been expected to be included in the lease if the negotiations for the lease had been at arm's length.

(5) (a) A house shall not be a qualifying premises for the purposes of section 43 or, in so far as it applies to expenditure other than expenditure on refurbishment, section 46 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards of construction of houses and the provision of water, sewerage and other services therein.

(b) A house shall not be a qualifying premises for the purposes of section 44 or 45 or, in so far as it applies to expenditure on refurbishment, section 46 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards for improvements of houses and the provision of water, sewerage and other services therein.

(c) A house shall not be a qualifying premises for the purposes of section 43, 44, 45 or 46 unless the house or, in a case where the house is one of a number of houses in a single development, the development of which it is a part complies with such guidelines as may, from time to time, be issued by the Minister for the Environment, with the consent of the Minister for Finance, for the purposes of furthering the objectives of the Urban Renewal Act, 1986, and, without prejudice to the generality of the foregoing, such guidelines may include provisions in relation to all or any one or more of the following:

(i) the design and the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, houses,

(ii) the total floor area and dimensions of rooms within houses, measured in such manner as may be determined by the Minister for the Environment,

(iii) the provision of ancillary facilities and amenities in relation to houses, and

(iv) the balance to be achieved between houses of different types and sizes within a single development of two or more houses or within such a development and its general vicinity having regard to the housing existing or proposed in that vicinity.

(6) A house shall not be a qualifying premises for the purposes of section 43, 44, 45 or 46 unless persons authorised in writing by the Minister for the Environment for the purposes of those sections are permitted to inspect it at all reasonable times upon production, if so requested by a person affected, of their authorisations.

(7) For the purposes of sections 43, 44, 45 and 46 references therein to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, any premises shall be construed as including references to the development of the land on which the premises is situated or which is used in the provision of gardens, grounds, access or amenities in relation to the premises and, without prejudice to the generality of the foregoing, as including, in particular—

(a) demolition or dismantling of any building on the land,

(b) site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works,

(c) walls, power-supply, drainage, sanitation and water supply, and

(d) the construction of any outhouses or other buildings or structures for use by the occupants of the premises or for use in the provision of amenities for the occupants.

(8) (a) For the purposes of determining, in relation to any claim under section 43 (2), 44 (4), 45 (2) or 46 (2), as the case may be, whether and to what extent expenditure incurred on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the premises which was actually carried out during the qualifying period shall be treated as having been incurred during that period.

(b) Where, by virtue of subsection (7), expenditure on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, a qualifying premises includes expenditure on the development of any land, paragraph (a) shall have effect, with any necessary modifications, as if the references therein to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the qualifying premises were references to the development of such land.

(9) (a) For the purposes of sections 43 and 44, other than for the purposes mentioned in subsection (8) (a), expenditure incurred on the construction of, or, as the case may be, conversion into, a qualifying premises shall be deemed to have been incurred on the date of the first letting of the premises under a qualifying lease.

(b) For the purposes of section 45, other than for the purposes mentioned in subsection (8) (a), relevant expenditure incurred in relation to the refurbishment of a qualifying premises shall be deemed to have been incurred on the date of the commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates.

(c) For the purposes of section 46, other than for the purposes mentioned in subsection (8) (a), expenditure incurred on the construction or refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred that the premises is in use as a dwelling.

(10) For the purposes of sections 43, 44 and 45, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.

(11) Paragraph 5 of Schedule 1 to the Capital Gains Tax Act, 1975, shall have effect as if a deduction under section 43 (2), 44 (4) or 45 (2), as the case may be, were a capital allowance and as if any amount by way of rent deemed to have been received by a person under section 43 (4), 44 (6) or 45 (4), as the case may be, were a balancing charge.

(12) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 43, 44, 45 or 46, other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979, in like manner as an appeal would lie against an assessment to income tax or corporation tax and the provisions of the Tax Acts relating to appeals shall apply and have effect accordingly.

Chapter V Corporation Tax

48 Amendment of section 39 (meaning of “goods”) of Finance Act, 1980.

48.—(1) Section 39 (as amended by the Finance Act, 1992) of the Finance Act, 1980, is hereby amended in subsection (1A)—

(a) by the deletion of “and” in paragraph (a) and by the deletion of paragraph (b), and

(b) by the deletion of “and” in paragraph (i) and by the deletion of paragraph (ii).

(2) This section shall have effect as respects relevant accounting periods beginning on or after the 1st day of June, 1994.

(3) Subsections (2), (3), (4) and (5) of section 41 of the Finance Act, 1990, shall apply for the purposes of this section as they would apply for the purposes of that section if “11th day of April, 1994” were substituted for “20th day of April, 1990”.

49 Amendment of section 37 (application of section 84 (matters to be treated as distributions) of Corporation Tax Act, 1976) of Finance Act, 1988.

49.—Section 37 of the Finance Act, 1988, is hereby amended—

(a) by the insertion in subsection (1) (b), in the definition of “qualified company” and “relevant trading operations”, before “section 39B” of “section 39A (inserted by the Finance Act, 1981) and”, and

(b) by the insertion, after that definition, of the following proviso thereto:

“Provided that trading operations shall not be treated as relevant trading operations within the meaning of the said section 39A if they are not trading operations which could be certified by the Minister for Finance as relevant trading operations for the purposes of section 39B if they were carried out in the Area (within the meaning of the said section 39B) rather than in the airport (within the meaning of the said section 39A).”.

50 Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976.

50.—(1) Section 84A (as amended by section 45 of the Finance Act, 1993) of the Corporation Tax Act, 1976, is hereby amended—

(a) in subsection (3A)—

(i) by the substitution in paragraph (b)—

(I) for “in the period from the 31st day of January, 1990, to the 31st day of December, 1991” of “on or after the 31st day of January, 1990”, and

(II) for “as is paid in respect of relevant principal specified in the list” of “as is paid for a specified period in respect of relevant principal advanced and which was, at the time the relevant principal was advanced, specified in the list”,

(ii) by the addition, after subparagraph (ii) of paragraph (c), of the following subparagraph:

“(iii) where, at any time after an amount of relevant principal is specified in a list in accordance with subparagraph (iv) of paragraph (b) of subsection (3A) or subparagraph (ii) of paragraph (b) of subsection (3B), a company advances, or is treated as advancing, to a borrower relevant principal the interest in respect of which is treated, by virtue only of paragraph (b) of subsection (3A) or paragraph (b) of subsection (3B), as a distribution, the amount of relevant principal specified in the list shall be treated as reduced by the amount of relevant principal so advanced, or treated as advanced, and the amount so reduced shall be treated as the amount specified in the said list.”,

(iii) by the addition, after paragraph (d), of the following paragraph:

“(e) In this subsection and in subsection (3B), ‘specified period’, in relation to relevant principal, means the period commencing on the date on which the relevant principal was advanced and ending on the date on which the relevant principal falls to be repaid under the terms of the agreement to advance the said relevant principal or, if earlier—

(i) in the case of relevant principal advanced before the 11th day of April, 1994, the 11th day of April, 2001, and

(ii) in any other case, a date which is 7 years after the date on which the said relevant principal was advanced.”,

and

(b) in subsection (3B), by the substitution in paragraph (b) for “as is paid in respect of relevant principal specified in the list” of “as is paid for a specified period in respect of relevant principal advanced and which was, at the time the relevant principal was advanced, specified in the list”.

(2) (a) Where, at any time before the 7th day of December, 1993—

(i) relevant principal (hereafter referred to as the “first-mentioned relevant principal”), the interest in respect of which was treated, by virtue only of subsection (3A) (b) or (3B) (b) of section 84A of the Corporation Tax Act, 1976, as a distribution, advanced by a company to a borrower was repaid by the borrower before the scheduled repayment date, and

(ii) a further amount, or further amounts, of relevant principal, the interest in respect of which falls to be treated, by virtue only of the said subsection (3A) (b) or (3B) (b), as a distribution, was or were advanced to that borrower,

subparagraph (iii) (inserted by this section) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976, shall not apply in relation to so much of—

(I) the further amount of relevant principal advanced as does not exceed the amount of relevant principal repaid, or

(II) where there are more further amounts advanced than one, the aggregate of the further amounts of relevant principal advanced as does not exceed the relevant principal repaid.

(b) Where, by virtue of paragraph (a), the said subparagraph (iii) does not apply in relation to any amount of relevant principal advanced by a company, the company shall be treated as having—

(i) received a repayment of that amount of relevant principal, and

(ii) advanced a corresponding amount of relevant principal,

on the scheduled repayment date of the first-mentioned relevant principal.

(c) For the purposes of this subsection, where there are more further advances of relevant principal than one, the amount to which subparagraph (iii) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976, does not apply shall be referable as far as possible to an earlier rather than a later such further advance

(d) In this subsection “scheduled repayment date”, in relation to any relevant principal, means the date on which the relevant principal falls to be repaid under the terms of the agreement to advance the said relevant principal.

(3) This section shall—

(a) apply for the purposes of determining whether interest paid in respect of relevant principal advanced, or treated as advanced, on or after the 7th day of December, 1993, is to be treated as a distribution,

(b) take account of relevant principal advanced before the 7th day of December, 1993, and

(c) be construed together with sections 84 and 84A of the Corporation Tax Act, 1976:

Provided that interest which, but for this proviso, would not be treated as a distribution by virtue only of—

(i) subparagraph (iii) (inserted by this section) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976, may be treated as a distribution if it is paid in respect of relevant principal advanced before the 7th day of December, 1993, and

(ii) paragraph (e) (inserted by this section) of subsection (3A) of the said section 84A may be treated as a distribution if it is paid before the 11th day of April, 1994.

51 Amendment of section 56 (relief for gifts to The Enterprise Trust Ltd.) of Finance Act, 1992.

51.—Section 56 of the Finance Act, 1992, is hereby amended by the substitution in paragraph (a) of subsection (2) of “31st day of December, 1996,” for “31st day of March, 1994,”.

52 Relief for payments to National Co-operative Farm Relief Services Ltd. and grants made to its members.

52.—(1) In this section—

“the agreement” means the agreement in writing dated the 4th day of July, 1991, between the Minister for Agriculture, Food and Forestry and the National Co-operative for the provision of financial support for farm relief services together with every amendment of the agreement in accordance with Article 9.1 thereof;

“a member co-operative” means a society engaged in the provision of farm relief services which has been admitted to membership of the National Co-operative;

“the Minister” means the Minister for Agriculture, Food and Forestry;

“the National Co-operative” means the society registered on the 13th day of August, 1980, as National Co-operative Farm Relief Services Limited;

“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.

(2) Notwithstanding any provision of the Corporation Tax Acts—

(a) a grant made under Article 3.1 of the agreement by the Minister on or after the 1st day of April, 1993, to the National Co-operative, and

(b) a transfer of monies under Article 3.6 of the agreement by the National Co-operative on or after the 1st day of April, 1993, to a member co-operative,

shall be disregarded for all the purposes of those Acts.

53 Amendment of section 39B (relief in relation to income from certain trading operations carried on in Custom House Docks Area) of Finance Act, 1980.

53.—Section 39B of the Finance Act, 1980, is hereby amended in subparagraph (ii) of paragraph (c) of subsection (6) by the deletion from clause (III) after “currencies,” of “and” and by the substitution for clause (IV) of the following clauses:

“(IV) insurance and related activities, or

(V) the management of the whole or part of the investments and other activities of a specified collective investment undertaking within the meaning of section 18 (1) of the Finance Act, 1989,”.

54 Amendment of Chapter VI (Corporation tax: relief in relation to certain income of manufacturing companies) of Finance Act, 1980.

54.—Chapter VI of Part I of the Finance Act, 1980, is hereby amended, as respects accounting periods ending on or after the 1st day of May, 1994—

(a) by the insertion after section 39B (inserted by the Finance Act, 1987) of the following section—

“Credit for foreign tax.

39C.—(1) (a) In this section—

‘an amount receivable from the sale of goods’ means an amount which—

(i) being an amount receivable from the sale of computer software, or

(ii) by virtue of subsection (1CC) (b) (ii) of section 39, subsection (7) (b) of section 39A or subsection (8) (b) of section 39B,

is regarded as receivable from the sale of goods for the purposes of relief under this Chapter;

‘relevant foreign tax’, where borne by a company in respect of an amount receivable from the sale of goods, means tax—

(i) which, under the laws of any foreign territory, has been deducted from that amount,

(ii) which has not been repaid to the company, and

(iii) for which credit is not allowable under arrangements within the meaning of Schedule 10 to the Income Tax Act, 1967;

‘the total amount receivable from the sale of goods’, in relation to a company in the course of a trade in a relevant accounting period, means the aggregate of amounts, receivable by the company in the course of the trade in the relevant accounting period, which are regarded by virtue of any provision of this Chapter as receivable from the sale of goods for the purposes of relief under this Chapter.

(b) For the purposes of this section—

(i) so much of the corporation tax which would, apart from this section, be payable by a company for a relevant accounting period shall be treated as attributable to an amount receivable from the sale of goods in the course of a trade as would not be so payable if that amount receivable, and the income referable to it, were to be disregarded for the purposes of the Corporation Tax Acts;

(ii) the amount of any income of a company referable to an amount receivable from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be such sum as bears to the total amount of the income of the company from the sale of goods in the course of the trade for the relevant accounting period the same proportion as the

said amount receivable from the sale of goods bears to the total amount receivable by the company from the sale of goods in the course of the trade in the relevant accounting period;

(iii) the total amount of income of a company from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be the sum referred to in subsection (3) of section 41 which is to be taken to be the income of the trade for the relevant accounting period referred to in the expression ‘the income from the sale of those goods’ in subsection (2) of the said section.

(2) The amount of corporation tax which would, apart from this subsection, be payable by a company for a relevant accounting period shall be reduced by nine-tenths of so much of any relevant foreign tax borne by the company in respect of an amount receivable from the sale of goods in that period in the course of a trade as does not exceed the corporation tax which would be so payable and which is attributable to the amount receivable from the sale of goods.”,

and

(b) in subsection (1) of section 41 (as amended by the Finance Act, 1992) by the insertion in paragraph (a) after “section” of “and section 39C”.

55 Amendment of section 44 (group dividends) of Finance Act, 1983.

55.—Section 44 of the Finance Act, 1983, is hereby amended as respects distributions made in an accounting period ending on or after the 31st day of December, 1993, by the addition after subsection (7) of the following subsection:

“(8) References in this section to dividends shall be construed as including references to distributions on the redemption, repayment or purchase by a company of its own shares or on the acquisition of those shares by another company which is a subsidiary (within the meaning of section 155 of the Companies Act, 1963) of the company, and references to the receipt of dividends or to the payment of dividends shall be construed accordingly.”.

56 Amendment of Part II (Corporation Tax) of Corporation Tax Act, 1976.

56.—Part II of the Corporation Tax Act, 1976, is hereby amended as follows—

(a) as respects accounting periods beginning on or after the 1st day of January, 1995, by the insertion after section 12 of the following section:

“Foreign currency: computation of income and chargeable gains.

12A.—(1) (a) In this section—

‘profit and loss account’ means—

(i) in the case of a company (hereafter in this definition referred to as the ‘resident company’) resident in the State, the account of that company, and

(ii) in the case of a company (hereafter in this definition referred to as the ‘non-resident company’) which is not resident in the State but which is carrying on a trade in the State through a branch or agency, the account of the business of the company carried on through or from such branch or agency,

which in the opinion of the auditor appointed under section 160 of the Companies Act, 1963, or under the law of the State in which the resident company or non-resident company, as the case may be, is incorporated and which corresponds to that section, presents a true and fair view of the profit or loss of the resident company or the said business of the non-resident company, as the case may be;

‘rate of exchange’ means a rate at which two currencies might reasonably be expected to be exchanged for each other by persons dealing at arm's length or, where the context so requires, an average of such rates;

‘relevant contract’, in relation to a company, means any contract entered into by the company for the purpose of eliminating or reducing the risk of loss being incurred by the company due to a change in the value of a relevant monetary item, being a change resulting directly from a change in a rate of exchange;

‘relevant monetary item’, in relation to a company, means money held or payable by the company for the purposes of a trade carried on by it.

(b) The treatment of a contract entered into by a company as a relevant contract for the purposes of this section shall be ignored for any other purposes of the Tax Acts.

(2) Notwithstanding section 11, for the purposes of corporation tax the amount of any gain or loss, whether realised or unrealised, which—

(a) is attributable to any relevant monetary item or relevant contract of a company,

(b) results directly from a change in a rate of exchange, and

(c) is properly credited or debited, as the case may be, to the profit and loss account of the company,

shall be brought into account in computing the trading income of the company.

(3) Notwithstanding section 13, for the purposes of corporation tax, where any gain or loss arises to a company in respect of—

(a) a relevant contract of the company, or

(b) money held by the company for the purposes of a trade carried on by it,

so much of that gain or loss as results directly from a change in a rate of exchange shall not be a chargeable gain or an allowable loss, as the case may be, of the company:

Provided that this subsection shall not have effect as respects any gain or loss arising to a company carrying on life business within the meaning of section 50 (2), being a company which is not charged to corporation tax in respect of that business under Case I of Schedule D.”,

and

(b) as respects accounting periods beginning on or after the 1st day of January, 1994, by the insertion after section 14 of the following section:

“Foreign currency: capital allowances and trading losses.

14A.— (1) (a) In this section—

‘functional currency’ means—

(i) in relation to a company which is resident in the State, the currency of the primary economic environment in which the company operates, and

(ii) in relation to a company which is not resident in the State, the currency of the primary economic environment in which the company carries on trading activities in the State:

Provided that where the profit and loss account of a company for any period of account has been prepared in terms of the currency of the State, that currency shall be the functional currency of the company for that period;

‘profit and loss account’ and ‘rate of exchange’ have the meanings assigned to them, respectively, in section 12A;

‘representative rate of exchange’ means a rate of exchange of a currency for another currency equal to the mid-market rate at close of business recorded by the Central Bank of Ireland, or by a similar institution of another State, for those two currencies.

(b) For the purposes of this section the currency of the primary economic environment of a company shall be determined—

(i) in the case of a company which is resident in the State, with reference to the currency in which—

(I) revenues and expenses of the company are primarily generated, and

(II) the company primarily borrows and lends, and

(ii) in the case of a company which is not so resident and which carries on trading activities in the State, with reference to the currency in which—

(I) revenues and expenses of those activities are primarily generated, and

(II) the company primarily borrows and lends for the purposes of those activities.

(c) For the purposes of this section the day on which any expenditure is incurred shall be taken to be the day on which the sum in question becomes payable.

(2) The amount, which may be nil, of any allowance or charge which falls to be made for any accounting period—

(a) in taxing a trade of a company, and

(b) by reference to capital expenditure incurred by the company on or after the 1st day of January, 1994,

shall be—

(i) computed in terms of the functional currency of the company by reference to amounts expressed in that currency, and

(ii) given effect, in accordance with section 14 (2) (a), by being treated as a trading expense or receipt, as the case may be, of the trade in computing the trading income or loss, expressed in that functional currency, of the trade for that accounting period:

Provided that—

(I) for the purposes of the computation of an allowance or charge which falls to be made for an accounting period (hereafter in this proviso referred to as the ‘first-mentioned period’) by reference to capital expenditure incurred by a company on or after the 1st day of January, 1994, and

(II) without prejudice to any allowance made by reference to that expenditure for an accounting period earlier than the first-mentioned period,

where the said expenditure was incurred, or an allowance referable to it was computed, in terms of a currency other than the functional currency of the company for the first-mentioned period, then that expenditure or allowance, as the case may be, shall be expressed in terms of that functional currency by reference to a representative rate of exchange of the said functional currency for the other currency for the day on which the said expenditure was incurred.

(3) For the purposes of sections 16 and 18, the amount, which may be nil, of any set-off due to a company against income or profits of an accounting period in respect of a loss from a trade incurred by the company in an accounting period beginning on or after the 1st day of January, 1994, shall—

(a) be computed in terms of the company's functional currency by reference to amounts expressed in that currency, and

(b) then be expressed in terms of the currency of the State by reference to the rate of exchange which—

(i) is used to express in terms of the currency of the State the amount of the income from the trade for the accounting period in which the loss is to be set off, or

(ii) would be so used if there were such income:

Provided that—

(I) for the purposes of the computation of any set-off due to a company against income or profits of an accounting period (hereafter in this proviso referred to as the ‘first-mentioned period’) in respect of a loss from a trade incurred by the company in an accounting period beginning on or after the 1st day of January, 1994, and

(II) without prejudice to any set-off made against the income or profits of an accounting period earlier than the first-mentioned period by reference to that loss,

where that loss, or any set-off referable to that loss, was computed in terms of a currency other than the functional currency of the company for the first-mentioned period in this proviso, then that loss or set-off, as the case may be, shall be expressed in terms of that functional currency by reference to a rate of exchange of the said functional currency for the other currency, being an average of representative rates of exchange of that functional currency for the other currency during the accounting period in which the loss was incurred.”.

57 Corporate unitholders in undertakings for collective investment.

57.—Chapter IV of Part I of the Finance Act, 1993, is hereby amended—

(a) in subsection (7) of section 17, by the insertion after “Capital Gains Tax Acts” of “other than section 18 (as amended by the Finance Act, 1994) of this Act”, and

(b) in section 18—

(i) by the substitution for subsection (1) of the following subsections:

“(1) Subject to the provisions of this section, as respects a payment made on or after the 6th day of April, 1994, in money or money's worth, to a unitholder by reason of rights conferred on the holder as a result of holding units in an undertaking for collective investment—

(a) where the holder is not a company, the payment shall not be reckoned in computing the total income of the holder for the purposes of the Income Tax Acts, and

(b) where, apart from this paragraph, the said payment would be brought into account for the purposes of computing income chargeable to corporation tax, such payment shall be treated as if it were the net amount of an annual payment, chargeable to tax under Case IV of Schedule D, from the gross amount of which income tax has been deducted at the standard rate.

(1A) (a) This subsection applies to a payment which—

(i) is made on or after the 6th day of April, 1994, in money or money's worth, by reason of rights conferred on a unitholder as a result of holding units in an undertaking for collective investment, and

(ii) apart from subsection (1), would be charged to corporation tax under Case I of Schedule D.

(b) Subsection (1) shall not apply to a payment to which this subsection applies.

(c) For the purposes of the Tax Acts other than paragraphs (d) and (e) of this subsection—

(i) the income, for a chargeable period, attributable to a payment to which this subsection applies shall be increased by an amount determined by reference to paragraph (d), and

(ii) the amount so determined shall be deemed to be an amount of income tax which shall—

(I) be set off against corporation tax assessable on the unitholder for the chargeable period, or

(II) in so far as it cannot be set off in accordance with clause (I), be repaid to the unitholder.

(d) The amount referred to in paragraph (c), by which the income attributable to a payment to which this subsection applies is to be increased, shall be determined by the formula—

I	A _ 100 A

where—

I is the said income, and

A is the standard rate per cent. for the year of assessment in which the payment is made.

(e) For the purposes of this subsection, in computing income attributable to a payment—

(i) an amount shall be deducted from the payment if the payment arises on a sale or other transfer of ownership, or on a cancellation, redemption or repurchase by the undertaking for collective investment, of units or an interest in units, and an amount shall not be deducted otherwise,

(ii) subject to the following provisions of this paragraph, the amount of the consideration in money or money's worth given by, or on behalf of, the unitholder for the acquisition of units, or an interest in units, for which the payment is made, and not any other amount, shall be deducted from the payment,

(iii) where units are acquired by the unitholder before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, the consideration for the acquisition of the units shall be deemed to be the amount of their market value (within the meaning of section 49 of the Capital Gains Tax Act, 1975) on the 6th day of April, 1994, if that amount is greater than the consideration given, or deemed by virtue of subparagraph (iv) to be given, by the unitholder for their acquisition,

(iv) where units are acquired by a unitholder for a consideration which is less than the market value (within the meaning of section 49 of the said Act) of the units on the day the unitholder acquired them, the consideration given by the unit holder for those units shall be deemed to be that market value, and

(v) the amount of consideration given for units shall be determined in accordance with paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978.”,

(ii) by the insertion in subsection (2)—

(I) after “collective investment” of “by a person other than a company”,

(II) after “Capital Gains Tax (Amendment) Act, 1978)” in subparagraph (ii) of “and applying subsection (5) of section 31 of the Capital Gains Tax Act, 1975”, and

(III) after “for the purposes of this subsection” of “and subsection (2A)”,

(iii) by the substitution in subsection (2) for “the provisions of the subsection” of “the provisions of this subsection and subsection (2A)”,

(iv) by the insertion after subsection (2) of the following subsection:

“(2A) Subject to subsections (3) and (4), as respects a disposal by a company on or after the 6th day of April, 1994, of units in an undertaking for collective investment, for the purposes of the Corporation Tax Acts—

(a) any chargeable gain accruing on the disposal shall, notwithstanding subsection (3) of section 1 of the Corporation Tax Act, 1976, be treated as if it were the net amount of a gain from the gross amount of which capital gains tax has been deducted at the standard rate of income tax,

(b) the amount to be brought into account in respect of the chargeable gain in computing, in accordance with section 13 of the Corporation Tax Act, 1976, the company's chargeable gains, for the accounting period in which the company disposes of the units, shall be the said gross amount, and

(c) the capital gains tax treated as deducted from the gross amount of the chargeable gain shall—

(i) be set off against the corporation tax assessable on the company for the said accounting period, or

(ii) in so far as it cannot be set off in accordance with subparagraph (i), be repaid to the company:

Provided that—

(I) as respects a disposal by a company of units, which it acquired before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, this subsection shall only apply to so much of the chargeable gain accruing to the company on that disposal of units as does not exceed the chargeable gain which would have accrued on the said disposal had the company sold and immediately reacquired those units on the 5th day of April, 1994, at their market value on that day, and

(II) this subsection shall be ignored for the purposes of section 12 (1) of the Capital Gains Tax Act, 1975.”,

and

(v) in subsection (4) by the substitution in paragraph (a) for “(1) and (2)” of “(1), (1A), (2) and (2A)”.

58 Life assurance and companies.

58.—Part IV of the Capital Gains Tax Act, 1975, is hereby amended by the insertion after section 20A (inserted by section 24 of the Finance Act, 1993) of the following section:

“20B.—(1) (a) In this section—

‘relevant policy’ means a policy of life assurance, or contract for a deferred annuity on the life of any person, entered into or acquired by a company on or after the 11th day of April, 1994, which is not a policy to which subsection (2) of section 20A (as inserted by section 24 of the Finance Act, 1993) applies;

‘relevant disposal’ means a disposal of, or an interest in, the rights under any relevant policy, other than—

(i) a disposal by a person who is not the original beneficial owner of those rights and who acquired them, or an interest in them, for a consideration in money or money's worth, or

(ii) a disposal resulting directly from the death, disablement or disease of a person, or one of a class of persons, specified in the terms of the policy;

‘relevant gain’ means a chargeable gain arising on a relevant disposal.

(b) (i) For the purposes of this section, a policy of assurance, or contract for a deferred annuity on the life of any person, entered into by a company before the 11th day of April, 1994, shall be treated as a policy or contract, as the case may be, entered into on or after that date if there is a variation of the policy or contract on or after that date which directly or indirectly increases the benefits secured by, or extends the term of, the policy or contract, as the case may be.

(ii) For the purposes of subparagraph (i), if a policy or contract entered into by a company before the 11th day of April, 1994, provides an option to have another policy or contract substituted for it or to have any of its terms changed, then any change in the terms of the policy or contract which is made in pursuance of the option shall be deemed to be a variation of the policy or contract, as the case may be.

(c) Subject to subsection (2), this section shall be construed together with subsections (3) and (4) of section 20, as if the said subsection (3) were not subject to subsection (2) of section 20.

(2) Section 20 (2) shall not have effect in respect of any relevant disposal.

(3) (a) For the purposes of the Corporation Tax Acts (within the meaning of section 155 of the Corporation Tax Act, 1976)—

(i) any relevant gain arising to a company shall be treated as if it were the net amount of a gain from the gross amount of which corporation tax has been deducted at the standard rate (within the meaning of section 1 of the Income Tax Act, 1967) of income tax,

(ii) the amount to be brought into account in respect of the relevant gain in computing, in accordance with section 13 of the Corporation Tax Act, 1976, the company's chargeable gains, for the accounting period in which the relevant gain arises, shall be the said gross amount, and

(iii) the corporation tax treated as deducted from that gross amount shall—

(I) be set off against the corporation tax assessable on the company for the said accounting period, or

(II) in so far as it cannot be set off in accordance with clause (I), be repaid to the company:

Provided that this paragraph shall be ignored for the purposes of section 12 (1) of this Act.

(b) This subsection shall be construed together with the Corporation Tax Act, 1976.

(4) For the purposes of this section, a contract, being a policy of life assurance or a contract for a deferred annuity on the life of any person, shall be treated as having been entered into by a company before the 11th day of April, 1994, if—

(a) (i) a document referable to the contract was served on the company in pursuance of section 52 of the Insurance Act, 1989, before the 11th day of April, 1994, and

(ii) the company entered into the contract on or before the 22nd day of April, 1994,

or

(b) (i) the contract was entered into before the 30th day of June, 1994, by the company,

(ii) before the 11th day of April, 1994—

(I) there was in existence a binding agreement in writing under which the company was obliged to acquire land, and

(II) preliminary commitments or agreements had been entered into by the company—

(A) to obtain a loan, which was to be secured on the land, to defray money applied in acquiring the land, and

(B) to enter into the contract primarily for the purpose of repaying the loan, and

(iii) the agreement under which the loan was advanced obliges the company to apply any payment made to it under the contract to the repayment of the loan before any other application by it of such payment.”.

59 Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989.

59.—As respects distributions made on or after the 1st day of June, 1994, section 25 (as amended by section 37 of the Finance Act, 1992) of the Finance Act, 1989, is hereby amended by the substitution for subsection (1) of the following subsection:

“(1) (a) Notwithstanding sections 64, 76, 93 and 170 of the Corporation Tax Act, 1976, and subsection (1A) of section 45 (as amended by this Act) of the Finance Act, 1980, but subject to subsections (2) and (3) of this section, where a company which makes a distribution on or after the 6th day of April, 1989, specifies, by notice in writing given to the inspector within 6 months of the end of the accounting period in which the distribution is made, the extent to which the distribution is to be treated, for the purposes of the said sections 64, 76, 93, 170 and the said section 45, as made for any accounting period or periods, the distribution shall be so treated for those purposes, irrespective of the period of account for which it was made.

(b) A part of a distribution treated under the provisions of paragraph (a) as made for an accounting period shall be treated for the purposes of sections 64, 76, 93 and 170 of the Corporation Tax Act, 1976, and subsections (1), (1A) and (2) of the said section 45 as a separate distribution.”.

60 Amendment of section 35 (profits of life business) of Corporation Tax Act, 1976.

60.—Section 35 of the Corporation Tax Act, 1976, is hereby amended by the insertion of the following proviso to subsection (1A):

“Provided that, in applying the definition of foreign life assurance business in section 36 of the Finance Act, 1988, for the purposes of this subsection, section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980, shall apply as if there were deleted from subsection (2) ‘and any certificate so given shall, unless it is revoked under subsection (4), (5) or (5A), remain in force until the 31st day of December, 2005’.”.

61 Amendment of section 40 (capital allowances for certain leased assets) of Finance Act, 1984.

61.—(1) Section 40 of the Finance Act, 1984, is hereby amended—

(a) in the definition of “the specified capital allowances” (as amended by section 53 of the Finance Act, 1986) in subsection (1), by the substitution of “subsection (6), (7), (7A) or (8)” for “subsection (6), (7) or (8)”, and

(b) by the insertion of the following subsection after subsection (7) (inserted by section 53 of the Finance Act, 1986):

“(7A) The reference in the definition of ‘the specified capital allowances’ in subsection (1) to machinery or plant to which this subsection applies is a reference to machinery or plant provided for leasing by a lessor to a lessee in the course of the carrying on by the lessor of relevant trading operations within the meaning of section 39A (inserted by the Finance Act, 1981), or section 39B (inserted by the Finance Act, 1988), of the Finance Act, 1980, and—

(a) in respect of the expenditure on which no allowance has been, or will be, made under Chapter I of Part XV of the Income Tax Act, 1967, or

(b) in respect of which no allowance on account of wear and tear falling to be made under section 241 of the Income Tax Act, 1967, has been, or will be, increased under section 11 of the Finance Act, 1967, or under section 26 of the Finance Act, 1971.”.

(2) Subsection (1) shall apply and have effect as respects accounting periods ending on or after the 31st day of December, 1993.

62 Amendment of section 28 (relief in relation to income from shipping trade) of Finance Act, 1987.

62.—Subsection (1) of section 28 of the Finance Act, 1987, is hereby amended by the insertion after “tug” in subparagraph (ii) of the definition of “qualifying ship” of “other than a tug in respect of which a certificate has been given by the Minister for the Marine certifying that, in the opinion of the Minister, the tug is capable of operating in seas outside the portion of the seas which are, for the purposes of the Maritime Jurisdiction Act, 1959 (as amended by the Maritime Jurisdiction (Amendment) Act, 1988), the territorial seas of the State”.

Chapter VI Capital Gains Tax

63 Amendment of Schedule 4 (administration) to Capital Gains Tax Act, 1975.

63.—(1) Schedule 4 to the Capital Gains Tax Act, 1975, is hereby amended by the substitution, in subparagraph (6) of paragraph 4, of “£5,000” for “two thousand pounds”.

(2) Subsection (1) shall apply and have effect as respects transactions effected on or after the 6th day of April, 1994.

64 Amendment of section 31 (unit trusts) of Capital Gains Tax Act, 1975.

64.—(1) Section 31 of the Capital Gains Tax Act, 1975, is hereby amended, as respects any disposal of units in a unit trust on or after the 6th day of April, 1994, by the deletion of subsection (5).

(2) Subject to subsection (1), section 31 of the Capital Gains Tax Act, 1975, shall have effect, as respects any disposal of units in a unit trust on or after the 1st day of September, 1993, as if there were substituted for subsection (5) the following subsection:

“(5) If throughout a year of assessment all the assets of a unit trust are assets, whether mentioned in section 19, or in any other provision of this Act, or of any other enactment relating to capital gains tax, to which section 19 applies, the units in the unit trust shall for that year be deemed not to be chargeable assets for the purposes of this Act.”.

(3) Where there is a disposal in the year 1994-95, or any subsequent year of assessment, of units in a unit trust—

(a) not being an undertaking for collective investment (within the meaning of section 17 of the Finance Act, 1993) which began carrying on business on or after the 25th day of May, 1993,

(b) all the assets of which were, throughout the year of assessment 1993-94, assets, whether mentioned in section 19 or in any other provision of the Capital Gains Tax Acts, to which section 19 applies, and

(c) the person disposing of the units acquired the units before the 6th day of April, 1994,

then the chargeable gain on the disposal shall be computed as if the units had been sold and immediately reacquired by that person on the 5th day of April, 1994, at their market value at that date:

Provided that this subsection shall not apply in relation to the disposal of units—

(i) if, as a consequence of the application of this subsection, a gain would accrue on that disposal to the person making the disposal and either a smaller gain or loss would so accrue if this subsection did not apply, or

(ii) if, as a consequence of the application of this subsection, a loss would so accrue and either a smaller loss or a gain would accrue if this subsection did not apply,

and, accordingly, in a case to which paragraph (i) or (ii) of this proviso applies, the amount of the gain or loss accruing on the disposal shall be computed without regard to the provisions of this subsection (other than this proviso) but, in a case where this proviso would otherwise substitute a loss for a gain or a gain for a loss, it shall be assumed, in relation to the disposal, that the units were acquired by the person disposing of them for a consideration such that neither a gain nor a loss accrued to that person on making the disposal.

65 Amendment of section 27 (relief for individuals on certain reinvestment) of Finance Act, 1993.

65.—Section 27 of the Finance Act, 1993, is hereby amended—

(a) in subsection (5), by the insertion of the following proviso to that subsection:

“Provided that where the disposal of the original holding is made at any time in the period beginning on the 6th day of May, 1993, and ending on the 5th day of April, 1994, the reference in paragraph (a) to ‘ending on the date which is one year after the date of the disposal of the original holding’ shall be construed as a reference to ‘ending on the 5th day of April, 1995’.”,

and

(b) by the substitution of the following subsection for subsection (7):

“(7) (a) In this subsection ‘qualifying trading operations’, in relation to a trade, means all the operations of the trade excluding those of dealing in shares, securities, land, currencies, futures or traded options.

(b) A trade shall be a qualifying trade for the purposes of subsection (6) if, throughout the specified period—

(i) it is conducted on a commercial basis and with a view to the realisation of profits, and

(ii) it consists wholly or mainly of qualifying trading operations:

Provided that a trade which, during the specified period, consists partly of qualifying trading operations and partly of other trading operations shall be regarded for the purposes of this subsection as a trade which consists wholly or mainly of qualifying trading operations if, but only if, the total amount receivable in the specified period by the company carrying on the trade from sales made and services rendered in the course of qualifying trading operations is not less than 75 per cent. of the total amount receivable by the company from all sales made and services rendered in the course of the trade in the specified period.”.

66 Reduced rate of capital gains tax on certain disposals of shares by individuals.

66.—(1) In this section—

“disposal” does not include a relevant disposal within the meaning of section 36 (1) of the Finance Act, 1982;

“ordinary share capital”, in relation to a company, has the meaning assigned to it in section 155 of the Corporation Tax Act, 1976;

“ordinary shares” means shares forming part of a company's ordinary share capital;

“period of ownership”, in relation to an individual making a disposal of qualifying shares, means the individual's period of continuous ownership of the shares, in the same capacity, ending with the date of such disposal and, for the purposes of this definition, where the shares were acquired by the individual on the death of that individual's spouse so that the individual's period of ownership would, apart from this definition, be treated as having commenced on the date of that death, the individual's period of ownership shall be deemed to be extended to include the individual's spouse's period of ownership ending on that date;

“qualifying company” shall be construed in accordance with subsection (2);

“qualifying shares”, in relation to a company, means ordinary shares of the company which are fully paid up and which carry no present or future preferential rights to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed;

“qualifying trade” shall be construed in accordance with subsection (4);

“qualifying trading operations”, in relation to a trade, means all the operations of the trade excluding those of dealing in shares, securities, land, currencies, futures or traded options;

“the specified period”, in relation to the disposal of qualifying shares, means the period of 5 years immediately preceding the date of the disposal of those shares;

“trade” includes a profession and “qualifying trade” and “qualifying trading operations” shall be construed accordingly;

“unquoted company” means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or dealt in on an unlisted securities market.

(2) For the purposes of this section a company shall be a qualifying company in relation to the disposal of qualifying shares where—

(a) at the date of acquisition of those shares, it is an unquoted company which is resident in the State and not resident elsewhere and which has an issued share capital the market value of which is not more than £25,000,000, and

(b) throughout the specified period, it is a company which is resident in the State and not resident elsewhere and—

(i) which exists wholly or mainly for the purposes of the carrying on of one or more qualifying trades, or

(ii) the business of which consists—

(I) wholly or mainly of the holding of shares in one or more connected companies, or

(II) wholly or mainly of both the holding of such shares and the carrying on of one or more qualifying trades.

(3) (a) A company shall be regarded as having satisfied the condition referred to in subparagraph (i) of paragraph (b) of subsection (2) if, but only if, throughout the specified period, not less than 75 per cent. of the market value of all the issued share capital of the company derives from the carrying on by the company of one or more qualifying trades.

(b) A company shall be regarded as having satisfied the condition referred to in clause (I) or (II), as the case may be, of subparagraph (ii) of paragraph (b) of subsection (2) if, but only if, throughout the specified period, not less than 75 per cent. of the market value of all the issued share capital of the company derives from the carrying on of one or more qualifying trades by the connected companies or, as the case may be, by the company and the connected companies.

(c) In a case where a connected company (hereafter in this paragraph referred to as “the first-mentioned company”) is a company whose business consists of the holding of shares in one or more companies, references in paragraph (b) to the connected companies shall be construed as including references to the companies which are connected with the first-mentioned company.

(4) For the purposes of this section a trade shall be a qualifying trade if, throughout the specified period, it consists of qualifying trading operations and where, during that period, a trade consists partly of qualifying trading operations and partly of other trading operations, the part of the trade which consists of other trading operations shall be treated as a separate trade.

(5) For the purposes of this section where a company (hereafter in this subsection referred to as “the first-mentioned company”) holds shares in another company that other company shall be regarded as connected with the first-mentioned company if—

(a) at the date of the acquisition of those shares by the first-mentioned company, it was an unquoted company,

(b) it is resident in the State and not resident elsewhere, and

(c) the voting rights in the company are exercisable by the first-mentioned company as respects not less than 20 per cent. of the total voting rights.

(6) As respects chargeable gains accruing to an individual on the disposal of qualifying shares in a qualifying company in a case where the individual's period of ownership of those shares is not less than 5 years, subsection (3) (inserted by section 60 of the Finance Act, 1992) of section 3 of the Capital Gains Tax Act, 1975, shall apply and have effect as if the reference therein to 40 per cent. were a reference to 27 per cent.

(7) (a) In this subsection and in subsection (8) “original shares” and “new holding” have, respectively, the meanings assigned to them in paragraph 2 of Schedule 2 to the Capital Gains Tax Act, 1975.

(b) If the time when an individual acquires qualifying shares would be determined under any of the provisions of Schedule 2 to the Capital Gains Tax Act, 1975, it shall be determined in the same way for the purposes of this section where the following conditions are satisfied, that is to say:

(i) both the original shares and the new holding constitute qualifying shares, and

(ii) the individual is not treated under subparagraph (3) of paragraph 2 of the said Schedule as giving or becoming liable to give any consideration, other than the original shares, for the acquisition of the new holding.

(8) (a) In a case where paragraph (b) of subsection (7) applies and has effect and the new holding is held for a period which is not less than 5 years, subsection (2) shall apply—

(i) as if the reference in paragraph (a) of subsection (2) to “at the date of acquisition of those shares” were a reference to “at the date of acquisition of the original shares”,

(ii) where the company in which the new holding subsists is not the company in which the original shares subsisted, as if the reference in paragraph (a) of subsection (2) to “it is” were a reference to “the company in which the original shares subsisted is”, and

(iii) as if the reference in paragraph (b) of subsection (2) to “it is” were a reference to “the company in which the new holding subsists is”.

(b) In a case where paragraph (b) of subsection (7) applies and has effect and the new holding is held for a period which is less than 5 years, subsection (2) shall apply—

(i) as if the reference in paragraph (a) of subsection (2) to “at the date of acquisition of those shares” were a reference to “at the date of acquisition of the original shares”, and

(ii) where the company in which the new holding subsists is not the company in which the original shares subsisted—

(I) as if the reference in paragraph (a) of subsection (2) to “it is” were a reference to “the company in which the original shares subsisted is”,

(II) as if the reference in paragraph (b) of subsection (2) to “throughout the specified period, it is” were a reference to “throughout that part of the specified period commencing on the date of the acquisition of the new holding, the company in which the new holding subsists is”, and

(III) as if the conditions referred to in paragraph (b) of subsection (2) applied also to the company in which the original shares subsisted but only in relation to the part of the specified period which does not include the part of that period mentioned in clause (II).

(9) This section shall apply and have effect as respects disposals made on or after the 6th day of April, 1994.

PART II Customs and Excise

Chapter I Excise Duty on Cigarettes—Introduction of Tax Stamps

67 Interpretation (Chapter I).

67.—In this Chapter—

“the Principal Act” means the Finance (Excise Duty on Tobacco Products) Act, 1977;

“the Regulations of 1992” means the European Communities (Customs and Excise) Regulations, 1992, (S.I. No. 394 of 1992).

68 Amendment of section 1 (interpretation) of Principal Act.

68.—Section 1 of the Principal Act is hereby amended—

(a) by the insertion in subsection (1) of the following definition after the definition of “smoking tobacco” (inserted by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979)):

“‘tax stamp’ means a label issued by the Revenue Commissioners under section 2A of this Act for the purpose of collecting the duty of excise imposed by section 2 of this Act.”,

and

(b) by the insertion of the following subsection after subsection (1):

“(1A) In this Act ‘authorised warehousekeeper’, ‘duty-suspension arrangement’, ‘tax representative’ and ‘tax warehouse’ have the same meanings, respectively, as they have in Chapter II of Part II of the Finance Act, 1992.”.

69 Liability for duty to be paid by tax stamps.

69.—The Principal Act is hereby amended by the insertion of the following section after section 2:

“2A.—(1) The duty of excise imposed by section 2 of this Act shall, in respect of cigarettes, be paid by means of the purchase of tax stamps issued by the Revenue Commissioners:

Provided that the Revenue Commissioners may, in exceptional circumstances, permit payment of the duty to be subject to the provisions of subsection (4) of this section.

(2) Liability for duty in respect of tax stamp purchases shall arise at the time the tax stamps are issued by the Revenue Commissioners to the purchaser.

(3) Subject to section 3 (3) of this Act, the Revenue Commissioners shall only issue tax stamps on payment of the appropriate amount of duty.

(4) Liability for duty in respect of other tobacco products shall arise at the time the goods are manufactured in the State or imported into the State or when they cease to be warehoused without payment of duty under section 4 whichever is the later.”.

70 Sale of cigarettes.

70.—The Principal Act is hereby amended by the insertion of the following section after section 2A (inserted by section 69):

“2B.—(1) With the exception of—

(a) cigarettes to which the provisions of subsection (2) of section 106 of the Finance Act, 1992, apply,

(b) cigarettes being held or delivered under a duty-suspension arrangement, and

(c) cigarettes to which the proviso to subsection (1) of section 2A of this Act apply,

cigarettes intended for sale, delivery or consumption in the State shall have affixed by the manufacturer, to each pack in which the cigarettes are intended to be put up for retail sale, a tax stamp in respect of which the duty appropriate to the pack of cigarettes has been paid:

Provided that cigarettes intended for sale or delivery in accordance with the provisions of Regulation 4 of the Regulations of 1992 shall not have tax stamps affixed.

(2) (a) Tax stamps affixed in the State to packs of cigarettes shall be affixed in a tax warehouse and in such manner as the Revenue Commissioners may prescribe in regulations made under section 8 of this Act.

(b) Where packs of cigarettes are brought into the State with tax stamps affixed they shall be affixed in such manner as the Revenue Commissioners may prescribe in regulations made under section 8 of this Act.”.

71 Amendment of section 3 (repayment, remission and deferment of payment) of Principal Act.

71.—Section 3 of the Principal Act is hereby amended—

(a) by the insertion of the following subsection after subsection (1):

“(1A) The Revenue Commissioners may, subject to compliance with such conditions as they consider appropriate to impose, repay or remit duty paid by means of tax stamps where it is shown to their satisfaction that the tax stamps have been destroyed or are damaged or otherwise unsuitable for the use for which they were issued.”,

and

(b) by the substitution of the following subsection for subsection (3):

“(3) The Revenue Commissioners may, subject to compliance with such conditions for securing payment of the duty as they may think fit to impose—

(a) in respect of the duty on cigarettes (other than cigarettes referred to in the proviso to subsection (1) of section 2A) and where duty liability arises in a period beginning on and including the fourth last day of a month up to and including the fifth last day of the subsequent month, permit payment of the duty imposed by section 2 of this Act to be deferred to a day not later than the last day of the second month following that subsequent month:

Provided that, where duty liability arises during the period beginning on and including the 28th day of October and ending on and including the 27th day of the subsequent December, the duty arising up to and including the 30th day of November and half the duty arising in the said period thereafter, as determined by the Revenue Commissioners, shall be paid not later than the subsequent 31st day of December.

(b) in respect of the duty on other tobacco products:

(i) other than on the last day in the month of December, where duty liability arises on a day in that month but such day is not a Saturday or a Sunday, permit payment of the duty imposed by section 2 of this Act to be deferred, as to one half, as determined by the Revenue Commissioners, of the duty, to a day not later than the last day of that month and, as to the remainder of the duty, to a day not later than the last day of the next following month of January, and

(ii) in any other case, permit payment of the duty imposed by section 2 of this Act to be deferred to a day not later than the last day of the month immediately following that in which liability arises.”.

72 Amendment of section 7 (ascertainment of retail prices of tobacco products) of Principal Act.

72.—Section 7 of the Principal Act is hereby amended in subsection (3) by the insertion of the following paragraph after paragraph (b):

“(c) A person shall not invite an offer to treat, offer for sale or sell by retail any packet of cigarettes at a price which is higher than the price on the basis of which that part of the excise duty imposed by section 2 of this Act which is chargeable by reference to the price at which the cigarettes are sold by retail has been charged on the cigarettes in question and any person who so invites, offers or sells shall be guilty of an offence and shall be liable on conviction to an excise penalty of £50 in respect of each such offence.”.

73 Amendment of section 8 (regulations) of Principal Act.

73.—Section 8 of the Principal Act is hereby amended in subsection (2) by the insertion of the following paragraphs after paragraph (h):

“(i) prescribe the form of tax stamps to be used to collect the excise duty imposed on cigarettes by section 2 of this Act,

(j) govern the printing, transportation, storage, sale, release and supply of tax stamps,

(k) prescribe the manner in which tax stamps are to be affixed,

(l) specify the records to be kept by tobacco manufacturers, importers, authorised warehousekeepers and tax representatives in relation to tax stamps which are either or both obtained and held by each one of them.”.

74 Offences in relation to tax stamps.

74.—The Principal Act is hereby amended by the insertion of the following section after section 10:

“10A.—(1) Subject to the provisions of Regulation 4 of the Regulations of 1992 and with the exception of cases referred to in the proviso to subsection (1) of section 2A of this Act, any person who offers for sale or delivery, where such sale or delivery does not take place under a duty-suspension arrangement, in the State cigarettes otherwise than in a pack or packs to which a tax stamp, on which duty at the appropriate amount has been paid, is affixed in the prescribed manner shall be guilty of an offence and the cigarettes in respect of which the offence has been committed and any goods which are packed with or used to conceal the said cigarettes shall be liable to forfeiture and, where the cigarettes are found in, on, or in any manner attached to, any vehicle or conveyance, the said vehicle or other conveyance shall be deemed to have been made use of in the conveyance of the said cigarettes and shall also be liable to forfeiture.

(2) Any person who counterfeits, alters or otherwise makes fraudulent use of, or who is knowingly concerned in holding, selling or dealing in a counterfeited or altered tax stamp shall be guilty of an offence.

(3) A person who is guilty of an offence under subsection (1) or (2) of this section shall be liable on conviction to a penalty of £1,000 in respect of each such offence.

(4) In a prosecution for an offence under subsection (1) of this section, it shall be presumed until the contrary is shown that duty had not been paid in respect of any pack or packs which do not have a tax stamp affixed thereto.”.

75 Amendment of section 11 (offences) of Principal Act.

75.—Section 11 of the Principal Act is hereby amended by the substitution of “£1,000 in respect of each such offence” for “£500”.

76 Amendment of section 18 (power to refuse delivery of goods) of Finance Act, 1939.

76.—Section 18 of the Finance Act, 1939, is hereby amended—

(a) in subsection (1) by the substitution of “one or more” for “either or both”,

(b) by the insertion of the following paragraph after paragraph (a) of subsection (1):

“(aa) to refuse to allow, during the said period, the issue of tax stamps to manufacturers or importers of cigarettes or to any other person where the quantity applied for appears to the Revenue Commissioners to exceed the quantity which is reasonable having regard to the circumstances, and”,

and

(c) by the insertion of the following subsection after subsection (1):

“(1A) In subsection (1) of this section—

‘cigarettes’ has the meaning (inserted by Regulation 26 of the European Communities (Customs and Excise) Regulations, 1992 (S.I. No. 394 of 1992)) it has in section 1 of the Finance (Excise Duty on Tobacco Products) Act, 1977;

‘tax stamps’ has the same meaning (inserted by section 68 of the Finance Act, 1994) it has in section 1 of the Finance (Excise Duty on Tobacco Products) Act, 1977.”.

77 Commencement (Chapter I).

77.—This Chapter shall come into operation on such day as the Minister for Finance may appoint by order, and different days may be so appointed for different provisions or for different purposes.

Chapter II Miscellaneous

78 Interpretation (Chapter II).

78.—In this Chapter—

“the Act of 1992” means the Finance Act, 1992;

“the Act of 1993” means the Finance Act, 1993;

“the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975);

“the Regulations of 1992” means the European Communities (Customs and Excise) Regulations, 1992 (S.I. No. 394 of 1992).

79 Tobacco products.

79.—(1) In this section and in the Third Schedule—

“the Act of 1977” means the Finance (Excise Duty on Tobacco Products) Act, 1977;

“cigarettes”, “cigars” and “fine-cut tobacco for the rolling of cigarettes” have the same meanings as they have in the Act of 1977, as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979), and by Regulations 26 and 29 of the Regulations of 1992.

(2) The duty of excise on tobacco products imposed by section 2 of the Act of 1977, shall, in lieu of the several rates specified in the Second Schedule to the Act of 1993, be charged, levied and paid, as on and from the 27th day of January, 1994, at the several rates specified in the Third Schedule.

80 Beer.

80.—The duty of excise on beer imposed by section 90 (1) of the Act of 1992, shall, in lieu of the rate specified in section 73 of the Act of 1993, be charged, levied and paid, as on and from the 27th day of January, 1994, at the rate of £15.65 per hectolitre per cent. of alcohol in the beer.

81 Spirits.

81.—(1) In this section “alcohol” means pure ethyl alcohol.

(2) The duty of excise on spirits imposed by paragraph 4 (2) of the Order of 1975, shall be charged, levied and paid, as on and from the 27th day of January, 1994, at the rate of £21.83 per litre of alcohol in the spirits in lieu of the rate specified in the said paragraph 4 (2) as amended by Regulation 18 (a) of the Regulations of 1992.

82 Cider and perry.

82.—(1) In the Fourth Schedule—

“actual alcoholic strength by volume” means the number of volumes of pure alcohol contained at a temperature of 20C in 100 volumes of the product at that temperature;

“ vol” means alcoholic strength by volume.

(2) The duty of excise on cider and perry imposed by paragraph 8 (2) of the Order of 1975, shall be charged, levied and paid, as on and from the 27th day of January, 1994, at the several rates specified in the Fourth Schedule in lieu of the several rates specified in the Third Schedule to the Act of 1993.

83 Wine and made wine.

83.—(1) In the Fifth Schedule—

“actual alcoholic strength by volume” means the number of volumes of pure alcohol contained at a temperature of 20C in 100 volumes of the product at that temperature;

“ vol” means alcoholic strength by volume.

(2) The duties of excise on wine and made wine imposed by paragraphs 5 (2) and 6 (2), respectively, of the Order of 1975, shall be charged, levied and paid, as on and from the 27th day of January, 1994, at the several rates specified in the Fifth Schedule in lieu of the several rates specified in the Fourth Schedule to the Act of 1993.

84 Hydrocarbons.

84.—(1) The duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975, shall, in lieu of the rate specified in section 150 (1) of the Act of 1992, be charged, levied and paid, as on and from the 27th day of January, 1994, at the rate of £299.39 per 1,000 litres.

(2) For the purposes of the rebate of duty on mineral hydrocarbon light oil provided for in section 56 (3) of the Finance Act, 1988, section 89 of the Finance Act, 1990, shall apply as on and from the 27th day of January, 1994, as if the reference therein to section 40 (1) of the Finance Act, 1989, which, by virtue of section 150 (2) of the Act of 1992, is construed as a reference to section 150 (1) of the Act of 1992, were instead a reference to subsection (1) of this section.

(3) The duty of excise on hydrocarbon oil imposed by paragraph 12 (1) of the Order of 1975 shall, in lieu of the rate specified in section 56 (4) of the Finance Act, 1988, be charged, levied and paid, as on and from the 27th day of January, 1994, at the rate of £235.49 per 1,000 litres.

(4) Subject to the provisions of the Imposition of Duties (No. 265) (Excise Duty on Hydrocarbon Oils) Order, 1983 (S.I. No. 126 of 1983), the amount of the rebate allowed under paragraph 12 (3) of the Order of 1975, shall, in respect of fuel oil within the meaning of paragraph 3 of the Imposition of Duties (No. 256) (Excise Duty on Hydrocarbon Oils) Order, 1981 (S.I. No. 404 of 1981), which is imported or delivered from the premises of a refiner of hydrocarbon oil or from a tax warehouse on or after the 27th day of January, 1994, and in lieu of the rate specified in section 69 (1) of the Act of 1993, be the amount of duty chargeable less an amount calculated at the rate of £10.60 per 1,000 litres.

(5) The duty of excise on used hydrocarbon oil imposed by Regulation 24 (2) (a) of the Regulations of 1992, shall not be charged or levied on or after the 27th day of January, 1994.

(6) Section 21 (15) of the Finance Act, 1935, is hereby amended—

(a) in the definition of “motor vehicle” (as amended by section 74 (4) of the Finance Act, 1991) by the insertion after “1952” of “, or a mobile crane or mobile well drilling equipment or mobile concrete pumping equipment”, and the said definition, as so amended, is set out in the Table to this subsection, and

(b) by the insertion after the interpretation of “combustion in the engine of a motor vehicle” of the following definitions:

“the expression ‘mobile concrete pumping equipment’ means a vehicle which is designed, constructed or adapted solely for pumping concrete and which is not used for any purpose on roads other than for travel or for pumping concrete;

the expression ‘mobile crane’ means a vehicle which is designed, constructed or adapted solely for lifting or elevating goods and which is not used for any purpose on roads other than for travel or for lifting or elevating goods;

the expression ‘mobile well drilling equipment’ means a vehicle which is designed, constructed or adapted solely for well drilling purposes and which is not used for any purpose on roads other than for travel or for well drilling;”.

TABLE

the expression “motor vehicle” means a mechanically propelled vehicle which is designed, constructed, and suitable for use on roads, but does not include a tractor which is designed and constructed for use for agricultural purposes or a road roller or a vehicle referred to in paragraph 2 (b) of Part I (inserted by the Finance Act, 1991) of the Schedule to the Finance (Excise Duties) (Vehicles) Act, 1952, or a mobile crane or mobile well drilling equipment or mobile concrete pumping equipment.

85 Amendment of section 132 (charge of excise duty) of Finance Act, 1992.

85.—(1) As respects vehicle registration tax charged, levied and paid as on and from the 27th day of January, 1994, subsection (3) (inserted by the Finance (No. 2) Act, 1992) of section 132 of the Act of 1992, is hereby amended—

(a) in paragraph (a), by the substitution of “29.25 per cent.” for “31.8 per cent.”,

(b) in paragraph (b), by the substitution of “23.2 per cent.” for “25.75 per cent.”, and

(c) in paragraph (f)—

(i) by the substitution in subparagraphs (i) and (ii) of “£2 per cubic centimetre” for “£2.50 per cubic centimetre”, and

(ii) by the substitution in subparagraph (ii) of “£1 per cubic centimetre” for “£1.25 per cubic centimetre”.

(2) As respects vehicle registration tax charged, levied and paid as on and from the date of the passing of this Act, paragraph (a) of subsection (3) (inserted by the Finance (No. 2) Act, 1992) of section 132 of the Act of 1992 is hereby amended by the substitution of “2,500 cubic centimetres” for “2,012 cubic centimetres”.

86 Amendment of section 60 (records) of Finance Act, 1993.

86.—Section 60 of the Finance Act, 1993, is hereby amended by the substitution of the following subsections for subsection (2):

“(2) (a) The Minister and all the licensing authorities may jointly establish and maintain records in relation to licences under the Act of 1952, trade licences under section 21 of the Finance (No. 2) Act, 1992, licences under section 10 of the Road Traffic Act, 1968, driving licences under Part III of the Act of 1933 and driving licences and provisional licences under Part III of the Act of 1961.

(b) Records established under this section may contain information derived from registers established under section 6 of the Act of 1920 and shall contain such other information in relation to the licences aforesaid, the holders of the licences, the duties of excise payable thereon and the vehicles licensed under the Act of 1952 as the Minister may determine.

(c) Records referred to in paragraph (a) shall be established and maintained in such form as the Minister may determine including a form that is not legible if it is capable of being converted into a legible form.

(2A) A licensing authority shall furnish to the Minister or another licensing authority such information, in such form and at such times as he directs for the purpose of the establishment and maintenance of records under this section.”.

87 Amendment of section 61 (evidence) of Finance Act, 1993.

87.—Section 61 of the Finance Act, 1993, is hereby amended by the substitution of the following subsections for subsections (1) and (2):

“(1) In any proceedings a certificate signed by an officer of the Minister authorised by the Minister for the purposes of this section and containing only—

(a) information stated to be taken from—

(i) records maintained by the Minister under subsection (1) of section 60,

(ii) records maintained jointly by the Minister and all the licensing authorities under subsection (2) of that section, or

(iii) records relating to vehicles or drivers of vehicles maintained by the Minister under any other provision of or made under any statute, or,

(b) information obtained by the Minister under section 131 (7) of the Act of 1992,

shall be sufficient evidence of the facts stated in the certificate until the contrary is proved.

(2) In any proceedings a certificate signed by an officer of a licensing authority authorised by the authority for the purposes of this section and containing only information stated to be taken from—

(a) records maintained by the authority under subsection (1) of section 60,

(b) records maintained jointly by the Minister and all the licensing authorities under subsection (2) of that section, or

(c) records relating to vehicles or drivers of vehicles maintained by the authority under any other provisions of or made under any statute,

shall be sufficient evidence of the facts stated in the certificate until the contrary is proved.”.

88 Amendment of section 123 (rates of duty) of Finance Act, 1992.

88.—Section 123 of the Act of 1992, is hereby amended in paragraph (c) (inserted by the Act of 1993) by the substitution of the following proviso for the proviso to the paragraph:

“Provided that the licence is expressed to relate only to Saturdays, Sundays and public holidays (within the meaning of the Holidays (Employees) Act, 1973) in the periods from—

(I) where appropriate, the 1st day of March or the date the licence is granted, whichever is the later, to the 30th day of March in the year concerned, and

(II) the 1st day of October or the date the licence is granted, whichever is the later, to the last day of February in the year concerned.”.

89 Exemption from duty on certain bets.

89.—(1) The duty on bets to which section 24 of the Finance Act, 1926, relates shall not be charged or levied on bets entered into on or after the commencement of this subsection where such bets—

(a) are entered into—

(i) during a meeting at which a series of horse races is held, and

(ii) at the place at which such meeting is held,

and

(b) are in respect of one or more than one event taking place at a place other than at such meeting.

(2) Subsection (1) shall come into operation on such day as the Minister for Finance may, by order, appoint.

PART III Value-Added Tax

90 Interpretation (Part III).

90.—In this Part—

“the Principal Act” means the Value-Added Tax Act, 1972;

“the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978;

“the Act of 1982” means the Finance Act, 1982;

“the Act of 1989” means the Finance Act, 1989;

“the Act of 1992” means the Finance Act, 1992.

91 Amendment of section 1 (interpretation) of Principal Act.

91.—Section 1 of the Principal Act is hereby amended in subsection (1), in subparagraph (b) of the definition of “new means of transport” (inserted by the Act of 1992):

(a) by the substitution of the following clause for clause (i):

“(i) which in the case of vessels and aircraft were supplied three months or less after the date of first entry into service and in the case of land vehicles were supplied six months or less after the date of first entry into service, or”,

and

(b) by the substitution in clause (ii) of “6,000 kilometres” for “3,000 kilometres”.

92 Amendment of section 3 (supply of goods) of Principal Act.

92.—Section 3 of the Principal Act is hereby amended in subparagraph (ii) of paragraph (g) (inserted by the Act of 1992) of subsection (1) by the insertion after “(va)” of “, (vb)”.

93 Person liable to pay tax in relation to certain supplies of immovable goods.

93.—The Principal Act is hereby amended by the insertion of the following section after section 4: